Pizza Inn: Rave Restaurant Group, Inc. Reports Third Quarter Financial Results

The following excerpt is from the company's SEC filing.
Dallas, Texas –
RAVE Restaurant Group, Inc. (NASDAQ: RAVE)
today reported financial results for the third quarter ended March 27, 2022.
Third Quarter Highlights:
Total Pizza Inn domestic retail sales increased 27.0% in the
quarter of fiscal 2022 compared to the same period of the prior year.
Total Pie Five domestic retail sales increased 19.5% in the
Pizza Inn domestic comparable store
retail sales increased 22.8% in the
Pie Five comparable store retail sales increased 21.4% in the
The Company recorded net income of $0.5 million for the
quarter of fiscal 2022 compared to net income of $0.4 million for the same period of the prior year.
Income before taxes was $0.5 million for the
quarter of fiscal 2022 compared to net income before taxes of $0.4 million for the same period of the prior year.
Total revenue increased by $0.4 million to $2.6 million for the
Convertible Notes decreased $1.6 million during the third quarter of fiscal 2022 to zero at
March

27, 2022
due to full repayment in cash at maturity on February 15, 2022.
On a fully diluted basis, net income increased $0.01 per share to $0.03 per share for the
quarter of fiscal 2022 compared to $0.02 per share for the same period of the prior year.
Cash and cash equivalents decreased $1.0 million during th
quarter of fiscal 2022 to $7.2 million at
Pizza Inn domestic unit count finished at 128.
Pizza Inn international unit count finished at 31.
Pie Five domestic unit count finished at 33.
“Eight consecutive quarters of profitability should not go unnoticed. Our Pie Five and Pizza Inn brands are energized by strong sales and profitability, relatively stable
store count and smart management of our cash,” said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group, Inc.
Clint Fendley, Chief Financial Officer of RAVE Restaurant Group, Inc. further explained, “Our 20% total revenue increase was driven by strong
same-store sales growth, relative unit count stability, and strong performance among new Pizza Inn units. These factors combined with strong cost controls yielded our eighth consecutive quarter of profitability. In the third quarter, we leveraged our
strong cash position to extinguish our $1.6 million in outstanding Convertible Notes and continue to hold in excess of $7.2 million in cash.”
Solano also credited the success of the previous eight quarters to the Company’s laser focus on its core products while challenging each brand to innovate. “Specifically,
Pie Five saw strong results from the launch of Mike’s Sticky Fingers Pizza and Pizza Inn’s rollout of House Pan Pizza.
Looking ahead, I am excited about our
innovation pipeline with the recent
NYXL Pizza. It is a well-timed value play, especially with rising inflation that should
directly impact our buffet-loving customers. We expect to continue our innovation pipeline to keep driving same-store sales. We are also updating our look, and in the coming months will open our first prototype, featuring a new buffet design,” Solano
concluded.
Non-GAAP Financial Measures
The Company’s financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). However, the Company also presents and
discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for
planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for its financial statements prepared in accordance with generally accepted accounting principles.
The Company considers EBITDA and Adjusted EBITDA to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and
other parties interested in our industry. The Company believes that EBITDA is helpful to investors in evaluating its results of operations without the impact of expenses affected by financing methods, accounting methods and the tax environment. The
Company believes that Adjusted EBITDA provides additional useful information to investors by excluding non-operational or non-recurring expenses to provide a measure of operating performance that is more comparable from period to period. Management
also uses these non-GAAP financial measures for evaluating operating performance, assessing the effectiveness of business strategies, projecting future capital needs, budgeting and other planning purposes.
“EBITDA” represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents earnings before interest, taxes, depreciation and
amortization, stock compensation expense, severance, gain/loss sale of assets, costs related to impairment and other lease charges, franchise default and closed store revenue/expense, and closed and non-operating store costs. A reconciliation of
these non-GAAP financial measures to net income is included with the accompanying financial statements.
Note Regarding Forward Looking Statements
Certain statements in this press release, other than historical information, may be considered forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created thereby. These forward-looking statements are based on current expectations that involve numerous risks, uncertainties and assumptions. Assumptions relating to
these forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions, regulatory framework and future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of RAVE Restaurant Group, Inc. Although the assumptions underlying these forward-looking statements are believed to be reasonable, any of the assumptions could be inaccurate and, therefore, there
can be no assurance that any forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of such information should not be regarded as a representation
that the objectives and plans of RAVE Restaurant Group, Inc. will be achieved.
About RAVE Restaurant Group, Inc.
Dallas-based RAVE Restaurant Group [NASDAQ: RAVE] has inspired restaurant innovation and countless customer smiles with its trailblazing pizza concepts.
he Company owns, franchises, licenses and supplies Pie Five and Pizza Inn restaurants operating domestically and internationally. Since 1958, Pizza Inn’s
house-made dough, house-shredded 100% whole milk mozzarella cheese, fresh ingredients and house-made signature sauce combined with friendly service solidified the brand to become America’s favorite hometown pizza place. This, in addition to its
small-town vibe, are the hallmarks of Pizza Inn restaurants. In 2011, RAVE introduced Pie Five Pizza, pioneering a fast-casual pizza brand that transformed the classic pizzeria into a concept offering personalization, sophisticated ingredients and
speed. Pie Five’s craft pizzas are baked fresh daily and feature house-made ingredients, creative recipes and craveable crust creations. For more information, visit
www.raverg.com
, and follow on Instagram
@pizzainnofficial
@piefivepizza
About Pizza Inn
popular pizza buffet, and friendly service have solidified the brand as
America’s hometown pizza place. Customers have been drawn to Pizza Inn for its reputation of using house-made dough, house-shredded 100% whole milk mozzarella cheese, fresh ingredients and house-made signature sauce. This, combined with its
small-town vibe, are the hallmarks of its restaurants that feature signature pan pizzas, chocolate chip ‘pizzerts,’ pasta dishes, salads and innovative creations that reflect today’s customer cravings. The brand continues to thrive with new menu
innovations including its popular NYXL pizza. Follow Pizza Inn on Instagram
and to learn more about franchising opportunities visit
https://www.pizzainn.com/franchise/
About Pie Five Pizza
Pie Five Pizza redefined fast-casual pizza by accelerating the baking time of its craft pizzas, without compromising quality. Pie Five offers individual, handcrafted pizzas
with house-made dough, baked fresh daily. The made-to-order pizzas feature house-shredded 100% whole milk mozzarella cheese, house-made marinara sauce and freshly chopped garden vegetables. Pie Five has been recognized as
Fast Casual’s
Top “Movers & Shakers”, “Best Franchise Deal” by
QSR Magazine
and Hot
Concepts winner by
Nation’s Restaurant News
. For more information, visit
PieFivePizza.com

and follow Pie Five on Instagram
Contact:
Investor Relations
469-384-5000
RAVE RESTAURANT GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
March 28,
REVENUES:
COSTS AND EXPENSES:
Cost of sales
General and administrative expenses
Franchise expenses
Gain on sale of assets
Impairment of long-lived assets and other lease charges
Bad debt expense (recovery)
Interest expense
Depreciation and amortization expense
Total costs and expenses
INCOME BEFORE TAXES
Income tax expense
NET INCOME
INCOME PER SHARE OF COMMON STOCK - BASIC:
INCOME PER SHARE OF COMMON STOCK - DILUTED:
Weighted average common shares outstanding - basic
18,005
17,991
17,061
Weighted average common and potential dilutive common shares outstanding
18,452
18,789
18,686
17,859
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
June 27,
ASSETS
CURRENT ASSETS
Accounts receivable, less allowance
for bad debts  of $22 and $47, respectively
Notes receivable, current
Deferred contract charges, current
Prepaid expenses and other
Total current assets
10,373
LONG-TERM ASSETS
Property, plant and equipment, net
Operating lease right of use asset, net
Intangible assets definite-lived, net
Notes receivable, net of current portion
Deferred contract charges, net of current portion
Total assets
11,819
13,345
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable - trade
Accrued expenses
Other current liabilities
Operating lease liability, current
Short term loan, current
Convertible notes short term, net of unamortized debt issuance costs and discounts
Deferred revenues, current
Total current liabilities
LONG-TERM LIABILITIES
Operating lease liability, net of current portion
Deferred revenues, net of current portion
Total liabilities
Common stock, $.01 par value;
authorized 26,000,000 shares; issued 25,090,058 and 25,090,058 shares, respectively; outstanding 18,004,904 and 18,004,904 shares, respectively
Additional paid-in capital
37,342
37,215
Accumulated deficit
(5,961
(7,196
Treasury stock at cost
Shares in treasury: 7,085,154 and 7,085,154, respectively
(24,537
Total shareholders’ equity
Total liabilities and shareholders’ equity
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
March 28, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
Adjustments to reconcile net income to
cash provided by/(used in) operating activities:
Stock compensation expense
Amortization of operating right of use assets
Amortization of intangible assets definite-lived
Amortization of debt issue costs
Gain on the sale of assets
Provision for bad debt
Changes in operating assets and liabilities:
Deposits and other
Accounts payable - lease termination impairments
Other long-term liabilities
Cash provided by/(used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments received on notes receivable
Purchase of intangible assets definite-lived
Purchase of property, plant and equipment
Cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of stock
Equity issuance costs - ATM offering
Payment of Convertible Notes
(1,597
Cash (used in)/provided by financing activities
(1,787
Net (decrease)/increase in cash and cash equivalents
(1,093
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Income taxes
Non-cash activities:
Conversion of notes to common shares
Operating lease right of use assets at adoption
Operating lease liability at adoption
ADJUSTED EBITDA
Severance
Franchisee default and closed store revenue
Closed and non-operating store costs

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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